Amazon is the largest online marketplace in the world and offers merchants numerous opportunities to sell their products and goods online. One of these opportunities is the role of Amazon Vendor as part of the Vendor Program.
In this article, we explain whether it is actually worth becoming an Amazon Vendor, what the differences are between an Amazon Seller and Vendor and what pitfalls you should pay particular attention to in the Amazon Vendor Program.
To become an Amazon Vendor or not?
There are numerous Amazon Sellers who sell their products and goods via the Amazon online marketplace. However, if you want to become an Amazon Vendor in the Vendor Central program, you have to wait for a official invitation from Amazon wait. This approach gives the impression that Amazon Vendor Central is an exclusive club to which only certain online retailers are invited.
However, not all that glitters is gold - anyone who wants to become an Amazon Vendor benefits from many advantages, but must also expect some disadvantages.
Vendor versus Seller on Amazon
Not all sellers on Amazon are the same. Amazon distinguishes between the conventional Seller Program and the Vendor Program.
- Amazon Seller are online retailers who sell their products directly to their customers and consumers on the Amazon Marketplace. They use the company's online marketplace as a kind of webshop. Among other things, they can set their own prices and offers and are responsible for the entire processing of orders and customer service. Many Amazon sellers even have their own warehouse and handle their own shipping.
However, there are also sellers in the traditional Seller Program who use the Fulfillment-by-Amazon (FBA) offer to simplify the processing of their orders.
- Amazon Vendors However, some retailers sell their products directly to Amazon before they reach the customer or consumer. However, these retailers must be officially invited by Amazon to do so. In this case, Amazon takes over the creation of the offers, order processing, customer service and shipping to the end customer.
As an Amazon Vendor, the retailer takes on the role of a supplier, as they no longer sell their products themselves, but simply supply Amazon. As a rule, however, Amazon Vendors also receive greater visibility on the Amazon website and can sell their products directly to Amazon sellers, who in turn offer their products on the Marketplace].
Prices in Vendor Central
One of the most important factors in deciding whether to become an Amazon Vendor is pricing. Amazon Vendors must sell their products to Amazon at a lower price than on the Marketplace. One of the reasons for this is that Amazon is responsible for order processing, customer service and shipping in the Vendor Program.
In addition, sellers and brand manufacturers as Amazon Vendors have No control over pricing of their products, as Amazon alone decides the price at which they are offered to the end customer. This can have both advantages and disadvantages for vendors.
Amazon uses a Artificial intelligence and algorithmsto always determine the most attractive price for the customer. This leads to competition, which can drive prices both up and down. However, vendors can also benefit from this aggressive pricing strategy by winning the so-called buybox in the medium term and generating higher sales figures. On the other hand, prices can fall into a Downward spiral which can lead to problems with other retailers and an inconsistent pricing strategy.
In the Seller range, on the other hand, brand manufacturers have More freedom in pricing. Nevertheless, Amazon also intervenes here by specifying maximum and minimum prices as strict recommendations. So-called Repricing tools can help to automatically adjust the price. Sellers can also use limited-time offer prices and deals to highlight the savings for customers.
Although the days of complete flexibility in pricing are over, sellers still have more room for maneuver compared to vendors.
Fulfillment as a vendor
Another advantage of the Amazon Vendor Program is the possibility to Fulfillment-by-Amazon (FBA) to use. This means that Amazon takes over the storage, shipping and returns processing for the vendor's products. This allows Amazon Vendors to save both time and resources.
In the vendor program, Amazon therefore takes over the Creation of Forecasts and buys the required quantity of products directly from the online retailer in order to sell them on to end customers. This means that vendors regularly receive orders from Amazon - including Purchase Orders which must be delivered to the Amazon Fulfillment Center within a certain time window.
In the FBA Seller Model However, the retailer is responsible for the forecasts, so they have to ask themselves how many items will be purchased in a certain period. Amazon also collects High long-term storage fees and limits the storage space for FBA Seller.
The Amazon Vendor Program therefore means greater scalability and dependency on Amazon for sellers, while the Seller Program is much more flexible.
Content as a vendor
Another important aspect for Amazon Vendors is the opportunity to improve their content management. In addition, vendors can also Optimize Amazon Acos.
This allows Amazon Vendors to Product descriptions and images directly to Amazon to ensure that they receive an optimal display for their products. Amazon can then use this content for marketing purposes, among other things, to increase the visibility of the Vendor's products on the Amazon website.
The creation of content on Amazon is regulated differently for vendors and sellers. While for vendors in particular strict guidelines apply, Amazon sellers have a little more Freedom. The strict rules for vendors are explained by the fact that Amazon can be held directly responsible for claims and statements on the product detail pages.
The most important elements of the content are as follows:
- Title
- Bullet points
- Product description
- A+ Content
- Gallery
These general content elements apply to both vendors and sellers. Only the A+ Premium Content is currently only available for vendors. However, sellers must also ensure that their brand appears in the Brand Registry is stored on Amazon.
As Amazon's guidelines are likely to become stricter for all participants in the future, brand manufacturers should also pay particular attention to aexpressive images and videos of your products lay.
Reviews as a vendor
After all, reviews are a important factor for the success of a salesperson on Amazon. It makes little difference whether you are a retailer in the Seller Program or the Vendor Program.
Without good reviews, a product can hardly be successful and negative reviews are one of the main reasons why products are not bought or sold. On the other hand, sellers and manufacturers can use a good strategy and many positive reviews quickly reach the top and make unknown products successful on Amazon.
Programs such as Amazon Vine. The program enables brand manufacturers to send their products to product testers, who then give their honest opinion in the form of an Amazon review. In addition, there is the Early Reviewer Programwith which sellers have the chance to generate traffic on Amazon within the first few weeks.
Another important point is the Responding to reviews - especially negative feedback. Amazon has recently removed this function, but there should be a better solution in the future for sellers to communicate with their customers.
Amazon vendor pitfalls
Despite the many advantages of the Amazon Vendor Program, there are also some pitfalls that Amazon Vendors should be aware of.
Only use data from your own ERP
As a rule, success in sales is measured by the number of units sold or turnover. This data is automatically transferred to the internal ERP and merchandise management systems recorded.
However, this approach is no longer sufficient with Amazon, as the systems are automated to the maximum and all processes are geared towards the customer side. As a vendor, it is therefore important to specifically Sell Out and not just the sell-in. The collected data can then be viewed via Amazon Vendor Central and analyzed using tools such as AMVisor be processed.
It is therefore by no means enough to negotiate a contract and simply sell the product as an Amazon Vendor. Amazon's entire system is geared towards the customer and specifically designed to meet the needs and wishes of customers.
List new products with only the most necessary basic data and wait to see what happens
Another mistake that Amazon Vendors often make is that they don't focus on Optimized Amazon Listings pay attention. For example, new products from Amazon Vendors are often only listed with the most necessary basic data, which in our experience does not lead to the desired success.
Although Amazon has already abolished the traditional buyer as gatekeeper, this can also have a detrimental effect on retailers. The process of making a product visible on Amazon is now much more complex. more time-consuming and differs significantly from that in the regular retail world.
So if you want to be successful on Amazon, you have to Products visible to the end customer and market them in a targeted manner. In the world of Amazon, it is and remains the manufacturer's task to fulfill all aspects of marketing themselves in order to make their product visible and successful.
Focusing on just one country
Amazon is a global online marketplace that does not just focus on one country. Amazon Vendors should therefore also be able to offer their products in different countries.
Large global companies are often organized in different countries and work autonomously from each other. However, this can lead to problems when working with a global retail group such as Amazon, as Amazon Automated and algorithm-driven works.
If an Amazon Vendor activates its products in a German Vendor Account, for example, it can still happen that the global sourcing system of Amazon the same product in another European Vendor Central if it is cheaper or more reliably available there.
Amazon can also ship the products directly from a foreign fulfillment center to the end customer, resulting in Loss of sales for the Amazon Vendor can lead to a loss. To solve this dilemma, the company must either bundle its entire Amazon business centrally and eliminate all distributors or pursue a uniform pricing policy across Europe in order to eliminate cross-sourcing as far as possible.
Do not exclude all returns
Finally, Amazon Vendors should not exclude all returns from the outset. This can lead to customers being deterred from making a purchase because they fear that they will not be able to return the product.
Amazon Vendors should ensure that they have a Fair and customer-friendly return and refund policy to increase customer satisfaction and reduce the likelihood of negative reviews and chargebacks.
However, there are two types of returns that are particularly common pitfalls:
- Defective: A customer can return a defective product that was already defective at the manufacturer. However, Amazon does not usually carry out a check, so it is quite common for the reason for the return to be incorrect. However, items under 40 euros can only be returned free of charge if they are actually defective. This means that many manufacturers receive defective returns that are actually flawless. The internal effort required for checking and crediting in the accounting department can be very expensive, which is why it is recommended to exclude defective returns.
- Undamaged Overstock: With undamaged overstock, Amazon sends back excess goods that the system does not need. However, Amazon calculates the excess stock on a warehouse basis, so it can happen that one fulfillment center returns an item while another needs it. The internal effort required to process returns is often disproportionate. It is therefore recommended to exclude overstock returns here too.
Putting the Amazon business in the hands of order processing
The supplier relationship with Amazon is fully automated, which can be unusual for many manufacturers. Often the entire Vendor Management in order processing. Among other things, this leads to orders being processed reactively and Amazon's potential not being fully exploited.
However, to get the most out of Amazon, different departments such as marketing, sales, IT, accounting and order processing need to work together. It is therefore important that the vendor Account actively managed and coordinated will.
Vendors expect advantages and disadvantages
If you are invited by Amazon to join the Vendor Program, there are a few things to consider. On the one hand, Amazon Vendors can benefit from numerous advantages, on the other hand, Amazon Sellers with their own Amazon Brand Store usually much more flexible.
This means that vendors can sell their products directly to Amazon, creating a Higher visibility and possibly also a higher turnover is made possible. However, vendors have Less control about their pricing and must adhere to Amazon's strict requirements.
It is important to Weighing up the pros and cons. In any case, the vendor program is only worthwhile if the additional administrative costs and fees are recouped. It may also be necessary to change internal operating procedures if you participate in the Amazon Vendor Program as a retailer. Retailers and sellers should consider all of these aspects when making their decision.
Amazon vendors have a B2B relationship with the online giant
In contrast to the Seller Program, an Amazon Vendor sells its products directly to Amazon and not to end customers via the platform. Vendors are therefore in a classic B2B relationship with Amazon.
The vendor delivers its Goods in large quantities to Amazonwho then takes care of sales, monitoring turnover, customer contact and pricing. Before the start of the collaboration, the vendor negotiates conditions with Amazon and issues price lists. Amazon compares these offers with the competition and creates an offer on this basis.
It is important to understand Amazon's conditions and requirements and to ensure that as a vendor you are able to meet these requirements in order to be successful in the long term.
Support from a personal agency
For companies that need support in managing their Amazon business, working with an Agency for Amazon Sellers & Vendors be a good option. We have been helping our customers optimize their product pages, improve their advertising strategies and manage their inventory since 2017.
We offer the following services as an agency for Amazon sellers & vendors:
- Seller & Vendor Management
- Sponsored Ads
- SEO
- Internationalization
- Workshops & trainings
- Inhouse Ads Reporting & Optimization Tool
With the support of our experienced Amazon agency, vendors can be sure that their Amazon business will be successful.
FAQ on the topic: Becoming an Amazon Vendor, yes or no?
What is a vendor on Amazon?
Vendors are retailers on Amazon who sell their products directly to Amazon and therefore hand over the entire sales process to the online shipping company.
What is Amazon Vendor Central?
Amazon Vendor Central is an exclusive platform that is only available to vendors by invitation. This platform is similar to Seller Central, where vendors can manage all their products and orders.
How do I become a vendor?
The Amazon Vendor Program is not a conventional seller program that any seller or merchant can join. Rather, you have to wait for an official invitation from Amazon to join the Vendor Program.
What is a vendor manager?
A Vendor Manager assumes a leading and decision-making position with regard to the selection of suppliers and partners for Amazon.
Conclusion
Anyone who receives an invitation from Amazon to join the Amazon Vendor Program must expect both advantages and disadvantages. While selling as a vendor offers greater visibility and a larger customer base, there are also pitfalls that should be avoided at all costs.
For companies that need support in this area, the help of our experienced agency can be a good option. After all, successful cooperation with Amazon requires careful planning, preparation and extensive support.
To become an Amazon Vendor or not?
There are numerous Amazon Sellers who sell their products and goods via the Amazon online marketplace. However, if you want to become an Amazon Vendor in the Vendor Central program, you have to wait for an official invitation from Amazon. This procedure gives the impression that Amazon Vendor Central is an exclusive club to which only certain online retailers are invited.
What is Amazon Vendor Central?
Amazon Vendor Central is an exclusive platform that is only available to vendors by invitation. This platform is similar to Seller Central, where vendors can manage all their products and orders.
